A worker repairs an election banner featuring Colorado Party's presidential candidate Horacio Cartes, in San Lorenzo, Paraguay, Friday. Paraguayan voters head to the polls Sunday to elect a new president.

Jorge Saenz/AP

View Caption

Asunción, Paraguay — Horacio Cartes smiles down on voters in Asunción from campaign posters promising a "new path" for Paraguay. But the frontrunner in Sunday's presidential election is accused of representing a return to the conservative policies of previous decades that perpetuated inequality.

Mr. Cartes is a tobacco magnate who says he will modernize the Southern Cone nation. He is standing for the Colorado Party, which held a grip on power for 61 years before former President Fernando Lugo won elections in 2008. And with Mr. Lugo controversially impeached last year – in what he called a parliamentary coup – a shift back to right-wing policies is expected here.

Cartes' closest contender is Efraín Alegre of the ruling Liberal Party. He is promising a "happy" Paraguay – a play on his surname – by tackling poverty. But, like Cartes, he is a conservative who observers say will favor business.

While Paraguay is expected to grow by 10 percent this year – due in large part to soy and beef exports – nearly a third of its people live below the poverty line, according to the World Bank. Such inequality is highly visible in Asunción, where sleek shopping malls contrast with slums that line the River Paraguay. More than 80 percent of land is controlled by two percent of the population, peasant movements here say. Cartes and Alegre are expected to do little to change that, distancing Paraguay from the left-wing models of regional neighbors Argentina, Bolivia, and Venezuela.

"Paraguay is facing a step backwards," says Asunción-based political analyst Alfredo Boccia. "With both candidates we're looking at an absence of the state in an almost feudal economic model that responds to the interests of landowners and the elite. There will be macroeconomic growth, but an accumulation of poverty."

'Reverses in social reforms'

Polls give Cartes a lead of a few percentage points over Mr. Alegre, with Mario Ferreiro of left-wing coalition Avanza País a distant third. Many people say they will vote for Cartes, a majority shareholder in more than 20 companies, because of his success in business. "He has [managed] his companies well, which will bode well for him in government," says Eva Amarilla, an information technology student.

But it is precisely Cartes' pro-business attitude that is expected to produce tensions if he wins. Lugo's ousting was provoked by the fatal eviction of peasants from land claimed by a Colorado Party senator. With Lugo's agrarian reform blocked in parliament by conservatives, Cartes would favor landowning elites. "Cartes will clash with the peasants," says José Morínigo, a pollster and former official in the Lugo government.

"The Colorado Party is not reformed," says Peter Lambert, a Paraguay specialist at the University of Bath in the UK. "With Cartes we can expect high levels of land and social inequality, and low-quality democracy with a politicization of the judiciary."

Alegre also has the support of the private sector. Environmental groups say that the Liberal Party post-Lugo has allowed multinationals to fast-track new strains of genetically modified crops, fiercely opposed by peasants.

Though he is criticized for his flimsy leadership, Lugo did increase access to healthcare and education. But with a divided and weak left, victory for either Cartes or Alegre would produce "serious reverses in social reforms," says Atilio Borón, a political analyst in Buenos Aires.

Cartes was recently reported to have made homophobic comments in which he compared gay people to monkeys. "Neither Alegre nor Cartes want gay society to be open," says Sergio López, who heads Somos Gay, a gay rights group in Asunción.

'A mystery'

Campaigning has been light on policy but heavy on corruption accusations. "There's no depth to Cartes' proposals," says Mr. Morínigo. "He's a mystery."Cartes was jailed for illegal currency dealings in the 1980s, though he was later acquitted. He was then investigated by the US for trafficking drugs and contraband cigarettes, according to Wikileaks. Chiqui Ávalos, author of The Other Face of Horacio Cartes, alleges that he laundered money for Brazilian drug mafia. "You can't be president with that background," Mr. Ávalos says.

Alegre has led the attacks on Cartes, but he isn't free of corruption charges. He is being investigated for "disappearing" $25 million of public funds while he was minister of public works under Lugo. He allegedly paid companies for infrastructure projects, such as paving an inter-city road, before rescinding the contracts before the work had even started.

"The people know where the mafia, corruption, and contraband are," Alegre said in his final rally last night. The Colorado Party accuses Alegre of using dirty tactics to win votes, but Rubén Ocampo, his campaign manager, says he is simply informing the electorate. "The people have a right to know," Mr. Ocampo says.

'New' or 'happy?'

Allegations on both sides, however, appear to have done little to change what is described here as the "fixed vote." The Colorado Party has nearly 2 million members across Paraguay, a support base founded on "patronage and clientelism" that persist from the stronata, a 35-year period of rule by military strongman Alfredo Stroessner, says Mr. Lambert. But Lugo overcame the odds in 2008 thanks to his coalition with the Liberals.

"Corruption is day to day here," says security guard Carlos Aguirre in a downtown Asunción plaza. He will vote for Cartes because he is a member of the Colorado Party. It's a similar story with many Liberal Party voters. "There’s nobody clean," says Hugo Díaz, a former farm administrator in his seventies, explaining he will only vote for Alegre because of his family's Liberal allegiance.

Meanwhile, analysts and voters do not predict the democratic process – already strained by Lugo's ousting – will be fully respected on Sunday. Both the Colorado and Liberal parties are widely expected to buy votes, observers say, a practice that has been frequent in the past. Yesterday, a Colorado Party senator was seemingly caught offering cash to provincial Liberal Party officials in exchange for annulled ballot papers. "I see a limited possibility for a true participatory democracy," says Mr Morínigo, the pollster.

It remains unclear how "new" or "happy" post-election Paraguay will be. "Cartes and Alegre are a return to the past," says Lugo, who is running for senator. "It's not macroeconomic indicators that matter, but the dignity of the poor."